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Lines Are Drawn Over Opting Out of Medicaid Plan

MIAMI — In the weeks since the Supreme Court ruled that states could opt out of a plan to vastly expand Medicaid under President Obama’s health care law, several Republican governors have vowed to do just that, attacking the expansion as a budget-busting federal power grab.

But it may not be so easy. A battle is brewing here in Florida, where Gov. Rick Scott took to national television soon after the ruling to announce that he would reject the expansion. Advocates for the poor and some players in the health care industry — especially hospitals, a powerful political lobby — intend to push back.

Hospital associations around the country have already signed off on cuts to reimbursement rates under the health care law on the assumption that the new paying customers they would gain, partly through the Medicaid expansion, would more than cover their losses.

“If we’re going to walk away from that coverage, we’ll simply see those dollars we contributed through cuts in hospital payments go to covering people in other states,” said Bruce Rueben, president of the Florida Hospital Association. “It’s a bad deal for people in Florida if it plays out that way.”

Given Florida’s size — it is the fourth most populous state in the nation, and more than 20 percent of its 19 million residents lack health insurance — the implications for Mr. Obama’s goal of insuring most Americans are significant. And Florida’s importance as one of the biggest battleground states in the presidential race adds potency to Mr. Scott’s clash with the Obama administration. Supporters of the law here have hurried to paint the Medicaid expansion as crucial not just morally, but economically.

But there is noticeable frustration with the White House from some. State Senator Nan Rich, a Democrat running for governor in 2014, said the administration needed to do a better job of countering state-level opposition.

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Simar Singh, a medical student at Florida International University, volunteers at a clinic that serves the poor and uninsured.Credit
Maggie Steber for The New York Times

“The Obama administration needs to be more forceful in going out there and explaining what is true and what’s not,” she said.

Despite the governor’s statements, leaders of the Republican-controlled state Legislature have not outright rejected the expansion, saying they will study their options over the coming months before making a decision.

“At the end of the day, we are going to take a rational approach that reflects the interests of Floridians, protects their hard-earned tax dollars and uses common sense, ” said Representative Will Weatherford, the incoming House speaker.

That more measured approach may reflect, in part, mixed public sentiment about the health care law. The boos that met Mitt Romney’s vow to repeal the law in a speech on Wednesday at the N.A.A.C.P.’s annual convention in Houston were a reminder that while Republicans believe strident opposition is a winning strategy, it may not be so clear-cut.

Mr. Scott describes Medicaid as a dysfunctional program, saying the portion of the state budget devoted to it is growing at more than three and a half times the rate of general revenues. The program currently costs about $21 billion a year in Florida, with the federal government covering 55 percent, and serves about 3.2 million people. Childless adults are generally not eligible but would be under the expansion.

All told, the expansion would add some 17 million people to the Medicaid rolls nationally, including perhaps one million or more in Florida.

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Dr. Edwin Bosa-Osorio of Miami said doctors too often have to take “the Plan B approach.”Credit
Maggie Steber for The New York Times

Under the law, the federal government would pay the full cost of each state’s expansion for the first three years, starting in 2014, and gradually decrease its share to 90 percent in 2020 and beyond. Last week, Mr. Scott said in national television interviews that the state would owe an additional $1.9 billion a year if, as the law calls for, it expanded Medicaid to everyone with incomes up to 133 percent of the poverty level. That is currently about $15,000 for a single person and $31,000 for a family of four.

Mr. Scott has since backed off the $1.9 billion estimate; his spokesman, Lane Wright, said he had based it on an outdated report. But the state is still anticipating high costs, partly because it expects that a number of people who are currently eligible for Medicaid but have not signed up will do so, a concern shared by other states. The federal government would pay a lower share of the cost for that group.

In Florida, the federal government would contribute a total of $20 billion for the newly eligible group from 2014 through 2019, according to the Kaiser Family Foundation, a nonpartisan research group. The foundation estimates Florida’s share of the expansion costs at between $1.2 billion and $2.5 billion from 2014 through 2019, depending on how many of those newly eligible for Medicaid actually enroll.

Without the expansion, Mr. Rueben and others in the health care industry said, the cost of uncompensated care — emergency treatment for those who are uninsured and cannot afford to pay — will continue to spiral upward and more costs will be shifted to the insured. Jackson Health System, the safety-net hospital system in Miami, provided more than $450 million in uncompensated care last year.

For the most part, hospitals are likely to hold their fire until after the election, said Jeff Goldsmith, a health industry analyst based in Virginia. “If Obama is defeated and the Senate flips, it’s all over,” Mr. Goldsmith said. “Do you spend a bunch of scarce political capital making people angry now, or wait until things have settled after November?”

Although clinics for the poor provide basic care to a constant stream of uninsured patients, those who need more complicated tests or procedures are often out of luck.

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Tracy Similien suffers chronic pain.Credit
Maggie Steber for The New York Times

Dr. Edwin Bosa-Osorio, chief medical officer at Jessie Trice Community Health Center, which serves several poor neighborhoods in the Miami area, said it can take more than a year for his patients to get diagnostic tests or consultations even at Jackson, the safety-net hospital system, because it is so overburdened.

As a result, Dr. Bosa-Osorio said, the center’s doctors too often have to take “the Plan B approach to a condition.”

For Tracy Similien, a 22-year-old student who injured her hip in a fall several years ago and still has frequent searing pain, that means relying on Tylenol instead of seeing an orthopedist or neurologist.

Fatima Zafar, Ms. Similien’s primary care doctor at Jessie Trice, said another of her patients has uterine fibroids that make her anemic and weak. She needs a hysterectomy, Dr. Zafar said, but is on a waiting list for it at Jackson. About 23 percent of Jessie Trice patients have Medicaid and can thus be referred to other hospitals that offer quicker appointments; most of the rest are uninsured. “You feel very limited in your scope,” Dr. Zafar said.

In a letter to governors on Tuesday, Kathleen Sebelius, the health and human services secretary, urged them to take advantage of “the unusually generous federal resources” and move ahead with expansions.

But State Senator Joe Negron, a Republican who is vice chairman of the Senate Budget Committee, said he was skeptical that the federal government could continue to pay for most of the expansion indefinitely given the size of the deficit.

“Medicaid should be a last-resort safety-net program and not a mechanism to reduce the number of uninsured,” he said. “We have to hope our economy keeps improving and more people get back to work and therefore would have access to private health insurance.”

Correction: July 12, 2012

Because of an editing error, an earlier version of this article contained a headline, appearing on the home page of NYTimes.com, that indicated that states could opt out of an expansion of Medicare. The program being expanded is Medicaid.

A version of this article appears in print on July 13, 2012, on page A1 of the New York edition with the headline: Lines Are Drawn Over Opting Out Of Medicaid Plan. Order Reprints|Today's Paper|Subscribe